In the first global recession of the Internet Age, budget-conscious consumers are showing they no longer have an endless appetite for every new gadget or media service.

Many users are looking to eliminate overlapping services that offer more of the same old formula entertainment in a different package or on another device.

With iPods, digital TVs, video recorders, multimedia PCs and broadband connections in many households, consumers considering their options now find a range of cost-effective online substitutes for broadcast, cable or satellite TV.

TV programming, not just short-form entertainment, is served up on video sites in markets around the globe at Google Inc’s YouTube, Daily Motion, Joost or at Hulu in the United States.

Could 2009 then be the year we seriously ask “What’s on the internet?” rather than “What’s on television?”

A study released last week by the consulting group Deloitte on media consumption habits suggests that this digital switchover may be occurring before our eyes.

The survey, completed in October, of U.S. consumers aged 14 to 75 found that a majority of consumers already see their PCs as more of an entertainment device than they do TVs.

The data is part of a five-country study of nearly 9,000 consumers that found parallel shifts toward online entertainment formats from TV, albeit with a more pronounced focus on mobile phone usage outside the US. In Brazil, consumers spend an average of 19.3 hours online for personal use versus 9.8 hours watching TV.

In the United States, three-quarters of so-called “millennials” — young consumers aged 14 to 19 raised entirely in the Internet Age — say PCs offer more entertainment than TVs.

About half of Baby Boomers agree that PCs offer more. Even a surprising 42 percent of the “Reading generation,” people aged 62 and above, see PCs as more entertaining than TVs.

U.S. “millennials” typically spend 18.8 hours a week online, nearly twice as much time as they spend on TV, the report finds.

They watch DVDs on computers for an average of almost two hours. They are nearly five times as likely to listen to music on a PC, phone or music player than to the radio, the data shows.

This all may come as news to “mature” adults — those over 62 — which the U.S. survey found watch 21.5 hours of TV per week, double the time they spend online.

But the shift has already happened, however long it may take older generations to catch up, says Ed Moran, Deloitte’s director of product innovation in New York, who led the study.

DIGITAL SUBSTITUTES

Forced to consider budgeting their once free-spending media habits, consumers may find getting better connected online to be the best way to cut their entertainment and communication costs.

Market researchers have seen a pick up over the course of the past year in switching behaviors as consumers cut back on premium movie or music packages or video rental subscription services.

For active consumers looking to watch more for less, there are abundant alternatives, albeit ones that may require several hours of battling “customer service” operators to extricate yourself from subscription traps, or in Europe, TV licensing fees.

Savvy consumers are finding “good enough” digital substitutes online that allow them to forego subscribing to pay TV or online video rental services.

That’s true already among the young, but is likely to spread among other age groups as they see the value for money.

To be be sure, only as these older generations with far greater discretionary spending power switch will the trend spell the end of older media models.

Gartner analyst Mike McGuire says young people with newer PCs are increasingly taking over the functions of programming their own media, given the amount of TV, movie and music content they can stream or download.

TV over the Internet is sneaking up on us, slowly, unlike the music revolution set in motion by online file sharing service Napster a decade ago and laid low the music industry. Internet bandwidth limitations probably limit how many can be channel surfing online at any one time.

But Broadcasters are getting into the act. In Britain, the BBC iPlayer lets Web users replay the last week of broadcast TV and radio programs and ranks as the second most popular multimedia site behind YouTube. For now, overseas users can only hear BBC radio on the iPlayer.

True, watching TV on the web will be held back until consumers can pick and choose on what device and when they see any particular program. Regulators could do more to help break down media bundling in favor of a la carte pricing that allows consumers to pick and choose what they watch while freeing up programming for the Web.

While “live TV” is still a work-in-progress on the web, a growing amount of legitimate news and entertainment is free to view, via laptops or on smaller digital TV displays hooked up to computers.

For all but the most premium film or sports content, there is a growing variety of quality online substitutes.

It’s not high-definition on a fat screen but it’s playing when you want, at a price that’s hard to beat. //01.12.09   //Eric Auchard